Local authorities in China this week announced that Zhang Yimou, the acclaimed director of such films as House of Flying Daggers and Raise the Red Lantern and the brain child behind China's Olympic ceremonies in 2008, would be fined 7.5m yuan (£750,000) for violating China's one-child-policy. Admitting to having two sons and a daughter, Zhang explained that it was his "traditional way of thinking" to aspire for a bigger family that led to his transgressions with the law.

Traditional Chinese culture, steeped in Confucian principles, sees family units as the foundation of society and prosperity within the family forms a key part of this – which often means having multiple children (with an emphasis on male heirs) to support parents and grandparents. As a result, the one-child-policy, introduced in the late 1970s, is in fact an affront to traditional beliefs. While economic growth in China has manifested in an improved quality of life and a ravaging consumerist culture, couples and grandparents look to find true meaning in the bliss of a different prosperity: the children of the next generation.

Zhang had kept two of his children a secret, so that they were not, until recently, registered as lawful residents. What this means for many Chinese parents who find themselves in the same situation in China is that their children have no identity or rights to public services such as education or healthcare, until the parents pay up.

Reactions from the public to Zhang's revelations and the announcement of his fine have been varied. There is outrage that the rich and famous in China can always flout the rules, as long as they have money and connections, when everyone else has to abide by such draconian measures. But an interview with Zhang in the Chinese media, in which he spoke of having to hide his children from the public, also drew sympathetic comments, with some calling the one-child-policy "inhumane". Others berated corrupt government authorities for laundering fines imposed by the policy, in a reference to the public furore last year over huge deficits in penalties collected by local governments.

The exact amount of the fine has never been consistent. In most cases the quantity equates to a multiple of the couple's annual income, but can differ wildly depending on which part of the country you live in and how the local authority calculates its sums. In some cases backdoor connections will enable you to pay off a local official and significantly lower the cost. Consequently huge disparities exist in the system, which has been blamed for violent altercations between parents and local officials, including a row last year that escalated into the fatal stabbing of two government staff by a father allegedly angry over the unaffordable cost for his fourth child.

The one-child policy has reportedly left the country short of around 300 million people – a figure that has been hailed by the government as being crucial for economic growth. But it has also left a huge void in the social ideals of a nation that never quite accepted the notion of a slim-lined family, and after so many years still in their heart of hearts yearns for the joy of more children. For decades the Chinese have envied westerners for their wealth, but above all, their ability to channel it into what the Chinese value the most, their children and family – but this is a type of social prosperity that has been out of scope.

Yet with recent government announcements to loosen the one-child-policy, allowing couples where one parent is an only-child to have two children, Chinese society may be on the cusp of achieving all it has ever wished for. In the last year, the Chinese president, Xi Jinping, has lauded the "Chinese dream" as the next step in the country's social ambition. While many, from commentators to citizens, have grappled with exactly what this is, perhaps Zhang Yimou's greatest offence was to simply realise the true Chinese dream ahead of others.